FIN 571 TUTOR Motivated Minds/fin571tutor.com FIN 571 TUTOR Motivated Minds/fin571tutor.com | Page 48

Suppose rf is 5% and rM is 10%. According to the SML and the
CAPM, an asset with a beta of −2.0
has a required return of negative 5% [= 5 − 2(10 − 5)]. Can this
be possible? Does this mean that
the asset has negative risk? Why would anyone ever invest in an
asset that has an expected and
required return that is negative? Explain
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FIN 571 Week 2 Individual Assignment Business Structure
Advice
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Write a 350 to 700 word response to the following e-mail:
Dear Consultant,
I am currently starting a business and developing my business plan. I'm in
need of some advice on how to start forming my business. I am not sure
exactly how it will be financed and whether or not I want to take on
partners. I am interested and willing to learn the intricacies of my options to
determine how to best proceed with my plan.
Please advise on what my options are, the advantages and disadvantages
of each, and possible tax consequences for each scenario?